Exhibit 99.11
Interest Rate Swap Agreement
<PAGE>
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of
November 29, 2007
between
MORGAN STANLEY CAPITAL
MORGAN STANLEY CAPITAL I TRUST
SERVICES INC.
2007-IQ16
...................................and
.........................................
have entered and/or anticipate entering into one or more
transactions (each a
"Transaction") that are or will be governed by this Master
Agreement, which
includes the schedule (the "Schedule"), and the documents and other
confirming
evidence (each a "Confirmation") exchanged between the parties
confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the
Schedule will have
the meanings therein specified for the purpose of this Master
Agreement.
(b) Inconsistency. In the event of any inconsistency between the
provisions of
the Schedule and the other provisions of this Master Agreement, the
Schedule
will prevail. In the event of any inconsistency between the
provisions of any
Confirmation and this Master Agreement (including the Schedule),
such
Confirmation will prevail for the purpose of the relevant
Transaction.
(c) Single Agreement. All Transactions are entered into in reliance
on the fact
that this Master Agreement and all Confirmations form a single
agreement between
the parties (collectively referred to as this "Agreement"), and the
parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each
party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of
this
Agreement.
(ii)
Payments under this Agreement will be made on the due date for
value
on that
date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in
the
required
currency. Where settlement is by delivery (that is, other than
by
payment),
such delivery will be made for receipt on the due date in the
manner
customary for the relevant obligation unless otherwise specified
in
the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to
(1) the
condition precedent that no Event of Default or Potential Event
of
Default
with respect to the other party has occurred and is continuing,
(2) the
condition precedent that no Early Termination Date in respect
of
the
relevant Transaction has occurred or been effectively designated
and
(3) each
other applicable condition precedent specified in this
Agreement.
(b) Change of Account. Either party may change its account for
receiving a
payment or delivery by giving notice to the other party at least
five Local
Business Days prior to the scheduled date for the payment or
delivery to which
such change applies unless such other party gives timely notice of
a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be
payable:--
(i) in the
same currency; and
(ii) in
respect of the same Transaction,
by each party to the other, then, on such date, each party's
obligation to make
payment of any such amount will be automatically satisfied and
discharged and,
if the aggregate amount that would otherwise have been payable by
one party
exceeds the aggregate amount that would otherwise have been payable
by the other
party, replaced by an obligation upon the party by whom the larger
aggregate
amount would have been payable to pay to the other party the excess
of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a
net amount
will be determined in respect of all amounts payable on the same
date in the
same currency in respect of such Transactions, regardless of
whether such
amounts are payable in respect of the same Transaction. The
election may be made
in the Schedule or a Confirmation by specifying that subparagraph
(ii) above
will not apply to the Transactions identified as being subject to
the election,
together with the starting date (in which case subparagraph (ii)
above will not,
or will cease to, apply to such Transactions from such date). This
election may
be made separately for different groups of Transactions and will
apply
separately to each pairing of Offices through which the parties
make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i)
Gross-Up. All payments under this Agreement will be made without
any
deduction
or withholding for or on account of any Tax unless such
deduction
or withholding is required by any applicable law, as modified
by
the
practice of any relevant governmental revenue authority, then
in
effect. If
a party is so required to deduct or withhold, then that party
("X")
will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to
be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under
this Section 2(d)) promptly upon the earlier of determining
that
such deduction or withholding is required or receiving notice
that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy),
or other documentation reasonably acceptable to Y, evidencing
such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to
the payment to which Y is otherwise entitled under this
Agreement,
such additional amount as is necessary to ensure that the net
amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y
would
have received had no such deduction or withholding been
required.
However, X will not be required to pay any additional amount to Y
to
the extent that it would not be required to be paid but for:--
(A)the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii)
Liability. If:--
(1) X is required by any applicable law, as modified by the
practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be
required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against
X,
then,
except to the extent Y has satisfied or then satisfies the
liability
resulting
from such Tax, Y will promptly pay to X the amount of such
liability
(including any related liability for interest, but including
any
related
liability for penalties only if Y has failed to comply with or
perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or
effective
designation of an Early Termination Date in respect of the relevant
Transaction,
a party that defaults in the performance of any payment obligation
will, to the
extent permitted by law and subject to Section 6(c), be required to
pay interest
(before as well as after judgment) on the overdue amount to the
other party on
demand in the same currency as such overdue amount, for the period
from (and
including) the original due date for payment to (but excluding) the
date of
actual payment, at the Default Rate. Such interest will be
calculated on the
basis of daily compounding and the actual number of days elapsed.
If, prior to
the occurrence or effective designation of an Early Termination
Date in respect
of the relevant Transaction, a party defaults in the performance of
any
obligation required to be settled by delivery, it will compensate
the other
party on demand if and to the extent provided for in the relevant
Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations
will be deemed
to be repeated by each party on each date on which a Transaction is
entered into
and, in the case of the representations in Section 3(f), at all
times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i)
Status. It is duly organised and validly existing under the laws
of
the
jurisdiction of its organisation or incorporation and, if
relevant
under such
laws, in good standing;
(ii)Powers. It has the power to execute this Agreement and any
other
documentation relating to this Agreement to which it is a party,
to
deliver
this Agreement and any other documentation relating to this
Agreement
that it is required by this Agreement to deliver and to perform
its
obligations under this Agreement and any obligations it has under
any
Credit
Support Document to which it is a party and has taken all
necessary
action to
authorise such execution, delivery and performance;
(iii) No Violation or
Conflict. Such execution, delivery and performance
do not
violate or conflict with any law applicable to it, any provision
of
its
constitutional documents, any order or judgment of any court or
other
agency of
government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its
assets;
(iv)Consents. All governmental and other consents that are required
to
have been
obtained by it with respect to this Agreement or any Credit
Support
Document to which it is a party have been obtained and are in
full
force and
effect and all conditions of any such consents have been
complied
with; and
(v)
Obligations Binding. Its obligations under this Agreement and
any
Credit
Support Document to which it is a party constitute its legal,
valid
and
binding obligations, enforceable in accordance with their
respective
terms
(subject to applicable bankruptcy, reorganisation, insolvency,
moratorium
or similar laws affecting creditors' rights generally and
subject,
as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a
proceeding
in equity
or at law)).
(b) Absence of Certain Events. No Event of Default or Potential
Event of Default
or, to its knowledge, Termination Event with respect to it has
occurred and is
continuing and no such event or circumstance would occur as a
result of its
entering into or performing its obligations under this Agreement or
any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its
knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding
at law or in
equity or before any court, tribunal, governmental body, agency or
official or
any arbitrator that is likely to affect the legality, validity or
enforceability
against it of this Agreement or any Credit Support Document to
which it is a
party or its ability to perform its obligations under this
Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information
that is
furnished in writing by or on behalf of it to the other party and
is identified
for the purpose of this Section 3(d) in the Schedule is, as of the
date of the
information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the
Schedule as
being made by it for the purpose of this Section 3(e) is accurate
and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as
being made by it for the purpose of this Section 3(f) is accurate
and true.
4. Agreements
Each party agrees with the other that, so long as either party has
or may have
any obligation under this Agreement or under any Credit Support
Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other
party or, in
certain cases under subparagraph (iii) below, to such government or
taxing
authority as the other party reasonably directs:--
(i) any
forms, documents or certificates relating to taxation specified
in
the
Schedule or any Confirmation;
(ii) any
other documents specified in the Schedule or any Confirmation;
and
(iii)upon
reasonable demand by such other party, any form or document
that
may be
required or reasonably requested in writing in order to allow
such
other
party or its Credit Support Provider to make a payment under
this
Agreement
or any applicable Credit Support Document without any deduction
or
withholding for or on account of any Tax or with such deduction
or
withholding at a reduced rate (so long as the completion, execution
or
submission
of such form or document would not materially prejudice the
legal or
commercial position of the party in receipt of such demand),
with
any such
form or document to be accurate and completed in a manner
reasonably
satisfactory to such other party and to be executed and to be
delivered
with any reasonably required certification,
in each case by the date specified in the Schedule or such
Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to
maintain in
full force and effect all consents of any governmental or other
authority that
are required to be obtained by it with respect to this Agreement or
any Credit
Support Document to which it is a party and will use all reasonable
efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with
all
applicable laws and orders to which it may be subject if failure so
to comply
would materially impair its ability to perform its obligations
under this
Agreement or any Credit Support Document to which it is a
party.
(d) Tax Agreement. It will give notice of any failure of a
representation made
by it under Section 3(f) to be accurate and true promptly upon
learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any
Stamp Tax
levied or imposed upon it or in respect of its execution or
performance of this
Agreement by a jurisdiction in which it is incorporated, organised,
managed and
controlled, or considered to have its seat, or in which a branch or
office
through which it is acting for the purpose of this Agreement is
located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any
Stamp Tax
levied or imposed upon the other party or in respect of the other
party's
execution or performance of this Agreement by any such Stamp Tax
Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a
party or, if
applicable, any Credit Support Provider of such party or any
Specified Entity of
such party of any of the following events constitutes an event of
default (an
"Event of Default") with respect to such party:--
(i)
Failure to Pay or Deliver. Failure by the party to make, when due,
any
payment
under this Agreement or delivery under Section 2(a)(i) or 2(e)
required
to be made by it if such failure is not remedied on or before
the
third
Local Business Day after notice of such failure is given to the
party;
(ii)
Breach of Agreement. Failure by the party to comply with or
perform
any
agreement or obligation (other than an obligation to make any
payment
under this
Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of
a Termination Event or any agreement or obligation under
Section
4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the
party
in
accordance with this Agreement if such failure is not remedied on
or
before the
thirtieth day after notice of such failure is given to the
party;
(iii)
Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to
be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or
the failing or ceasing of such Credit Support Document to be in
full
force and effect for the purpose of this Agreement (in either
case
other than in accordance with its terms) prior to the
satisfaction
of all obligations of such party under each Transaction to
which
such Credit Support Document relates without the written consent
of
the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv)
Misrepresentation. A representation (other than a
representation
under
Section 3(e) or (f)) made or repeated or deemed to have been made
or
repeated
by the party or any Credit Support Provider of such party in
this
Agreement or any
Credit Support Document proves to have been incorrect or
misleading
in any material respect when made or repeated or deemed to have
been made
or repeated;
(v)
Default under Specified Transaction. The party, any Credit
Support
Provider
of such party or any applicable Specified Entity of such party
(1)
defaults under a Specified Transaction and, after giving effect to
any
applicable
notice requirement or grace period, there occurs a liquidation
of, an
acceleration of obligations under, or an early termination of,
that
Specified
Transaction, (2) defaults, after giving effect to any
applicable
notice
requirement or grace period, in making any payment or delivery
due
on the
last payment, delivery or exchange date of, or any payment on
early
termination of, a Specified Transaction (or such default continues
for at
least
three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims,
repudiates or
rejects,
in whole or in part, a Specified Transaction (or such action is
taken by
any person or entity appointed or empowered to operate it or
act
on its
behalf);
(vi) Cross
Default. If "Cross Default" is specified in the Schedule as
applying
to the party, the occurrence or existence of (1) a default,
event
of default
or other similar condition or event (however described) in
respect of
such party, any Credit Support Provider of such party or any
applicable
Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less
than the
applicable
Threshold Amount (as specified in the Schedule) which has
resulted
in such Specified Indebtedness becoming, or becoming capable at
such time
of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or
(2) a
default by
such party, such Credit Support Provider or such Specified
Entity
(individually or collectively) in making one or more payments
on
the due
date thereof in an aggregate amount of not less than the
applicable
Threshold Amount under such agreements or instruments (after
giving
effect to any applicable notice requirement or grace period);
(vii)
Bankruptcy. The party, any Credit Support Provider of such party
or
any
applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay
its debts or fails or admits in writing its inability generally
to
pay its debts as they become due; (3) makes a general
assignment,
arrangement or composition with or for the benefit of its
creditors;
(4) institutes or has instituted against it a proceeding seeking
a
judgment of insolvency or bankruptcy or any other relief under
any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up
or
liquidation, and, in the case of any such proceeding or
petition
instituted or presented against it, such proceeding or petition
(A)
results in a judgment of insolvency or bankruptcy or the entry of
an
order for relief or the making of an order for its winding-up
or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant
to a consolidation, amalgamation or merger); (6) seeks or
becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets;
(7) has a secured party take possession of all or substantially
all
its assets or has a distress, execution, attachment,
sequestration
or other legal process levied, enforced or sued on or against all
or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed
or restrained, in each case within 30 days thereafter; (8) causes
or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to
any
of the events specified in clauses (1) to (7) (inclusive); or
(9)
takes any action in furtherance of, or indicating its consent
to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii)
Merger Without Assumption. The party or any Credit Support
Provider
of such
party consolidates or amalgamates with, or merges with or into,
or
transfers
all or substantially all its assets to, another entity and, at
the time
of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to
assume
all the obligations of such party or such Credit Support
Provider
under this Agreement or any Credit Support Document to which it
or
its predecessor was a party by operation of law or pursuant to
an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such
resulting, surviving or transferee entity of its obligations
under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to
a party or,
if applicable, any Credit Support Provider of such party or any
Specified Entity
of such party of any event specified below constitutes an
Illegality if the
event is specified in (i) below, a Tax Event if the event is
specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii)
below, and,
if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an
Additional
Termination Event if the event is specified pursuant to (v)
below:--
(i)
Illegality. Due to the adoption of, or any change in, any
applicable
law after
the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any
court,
tribunal
or regulatory authority with competent jurisdiction of any
applicable
law after such date, it becomes unlawful (other than as a
result of
a breach by the party of Section 4(b)) for such party (which
will be
the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect
of such Transaction or to comply with any other material
provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to
perform, any contingent or other obligation which the party (or
such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax
Event. Due to (x) any action taken by a taxing authority, or
brought in
a court of competent jurisdiction, on or after the date on
which a
Transaction is entered into (regardless of whether such action
is
taken or
brought with respect to a party to this Agreement) or (y) a
Change in
Tax Law, the party (which will be the Affected Party) will, or
there is a
substantial likelihood that it will, on the next succeeding
Scheduled
Payment Date (1) be required to pay to the other party an
additional
amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or
(2) receive a payment from which an amount is required to be
deducted
or withheld for or on account of a Tax (except in respect of
interest
under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is
required
to be paid in respect of such Tax under Section 2(d)(i)(4)
(other
than by
reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax
Event Upon Merger. The party (the "Burdened Party") on the next
succeeding
Scheduled Payment Date will either (1) be required to pay an
additional
amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or
(2) receive a payment from which an amount has been deducted or
withheld
for or on account of any Indemnifiable Tax in respect of which
the other
party is not required to pay an additional amount (other than
by
reason of
Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party
consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity
(which
will be
the Affected Party) where such action does not constitute an
event
described
in Section 5(a)(viii);
(iv)
Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified
in the
Schedule as applying to the party, such party ("X"), any Credit
Support
Provider of X or any applicable Specified Entity of X
consolidates
or
amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action
does not
constitute
an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity
is
materially
weaker than that of X, such Credit Support Provider or such
Specified
Entity, as the case may be, immediately prior to such action
(and, in
such event, X or its successor or transferee, as appropriate,
will be
the Affected Party); or
(v) Additional
Termination Event. If any "Additional Termination Event" is
specified
in the Schedule or any Confirmation as applying, the occurrence
of such
event (and, in such event, the Affected Party or Affected
Parties
shall be
as specified for such Additional Termination Event in the
Schedule
or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance
which would
otherwise constitute or give rise to an Event of Default also
constitutes an
Illegality, it will be treated as an Illegality and will not
constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time
an Event of
Default with respect to a party (the "Defaulting Party") has
occurred and is
then continuing, the other party (the "Non-defaulting Party") may,
by not more
than 20 days notice to the Defaulting Party specifying the relevant
Event of
Default, designate a day not earlier than the day such notice is
effective as an
Early Termination Date in respect of all outstanding Transactions.
If, however,
"Automatic Early Termination" is specified in the Schedule as
applying to a
party, then an Early Termination Date in respect of all outstanding
Transactions
will occur immediately upon the occurrence with respect to such
party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6)
or, to the
extent analogous thereto, (8), and as of the time immediately
preceding the
institution of the relevant proceeding or the presentation of the
relevant
petition upon the occurrence with respect to such party of an Event
of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous
thereto, (8).
(b) Right to Terminate Following Termination Event.
(i)
Notice. If a Termination Event occurs, an Affected Party will,
promptly
upon becoming aware of it, notify the other party, specifying
the
nature of
that Termination Event and each Affected Transaction and will
also give
such other information about that Termination Event as the
other
party may
reasonably require.
(ii)
Transfer to Avoid Termination Event. If either an Illegality
under
Section
5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or
if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected
Party, the Affected Party will, as a condition to its right to
designate
an Early Termination Date under Section 6(b)(iv), use all
reasonable
efforts (which will not require such party to incur a loss,
excluding
immaterial, incidental expenses) to transfer within 20 days
after it
gives notice under Section 6(b)(i) all its rights and
obligations
under this
Agreement in respect of the Affected Transactions to another of
its
Offices or Affiliates so that such Termination Event ceases to
exist.
If the
Affected Party is not able to make such a transfer it will give
notice to
the other party to that effect within such 20 day period,
whereupon
the other party may effect such a transfer within 30 days after
the notice
is given under Section 6(b)(i). Any such transfer by a party
under this
Section 6(b)(ii) will be subject to and conditional upon the
prior
written consent of the other party, which consent will not be
withheld
if such other party's policies in effect at such time would
permit it
to enter into transactions with the transferee on the terms
proposed.
(iii) Two
Affected Parties. If an Illegality under Section 5(b)(i)( 1) or
a Tax
Event occurs and there are two Affected Parties, each party will
use
all
reasonable efforts to reach agreement within 30 days after
notice
thereof is
given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right
to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section
6(b)(iii), as the case may be, has not been effected with respect
to
all Affected Transactions within 30 days after an Affected
Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax
Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either
party in the case of an Illegality, the Burdened Party in the
case
of a Tax
Event Upon Merger, any Affected Party in the case of a Tax
Event
or an
Additional Termination Event if there is more than one Affected
Party, or
the party which is not the Affected Party in the case of a
Credit
Event Upon Merger or an Additional Termination Event if there
is
only one
Affected Party may, by not more than 20 days notice to the
other
party and
provided that the relevant Termination Event is then
continuing,
designate
a day not earlier than the day such notice is effective as an
Early
Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If
notice designating an Early Termination Date is given under
Section
6(a) or
(b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or
Termination
Event is
then continuing.
(ii) Upon
the occurrence or effective designation of an Early Termination
Date, no
further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of
the Terminated Transactions will be required to be made, but
without
prejudice to the other provisions of this Agreement. The
amount,
if any,
payable in respect of an Early Termination Date shall be
determined
pursuant to Section 6(e).
(d) Calculations.
(i)
Statement. On or as soon as reasonably practicable following
the
occurrence
of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and
will
provide to
the other party a statement (1) showing, in reasonable detail,
such
calculations (including all relevant quotations and specifying
any
amount
payable under Section 6(e)) and (2) giving details of the
relevant
account to
which any amount payable to it is to be paid. In the absence of
written
confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining
such
quotation
will be conclusive evidence of the existence and accuracy of
such
quotation.
(ii) Payment
Date. An amount calculated as being due in respect of any
Early
Termination Date under Section 6(e) will be payable on the day
that
notice of
the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an
Event of
Default)
and on the day which is two Local Business Days after the day
on
which
notice of the amount payable is effective (in the case of an
Early
Termination Date which is designated as a result of a Termination
Event).
Such
amount will be paid together with (to the extent permitted
under
applicable
law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early
Termination
Date to
(but excluding) the date such amount is paid, at the Applicable
Rate. Such
interest will be calculated on the basis of daily compounding
and the
actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date
occurs, the
following provisions shall apply based on the parties' election in
the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a
payment method,
either the "First Method" or the "Second Method". If the parties
fail to
designate a payment measure or payment method in the Schedule, it
will be deemed
that "Market Quotation" or the "Second Method", as the case may be,
shall apply.
The amount, if any, payable in respect of an Early Termination Date
and
determined pursuant to this Section will be subject to any
Set-off.
(i) Events
of Default. If the Early Termination Date results from an Event
of
Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent
of
the Unpaid Amounts owing to the Defaulting Party.
(2) First
Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a
positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second
Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A)
the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent
of
the Unpaid Amounts owing to the Defaulting Party. If that amount
is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an
amount will be payable equal to the Non-defaulting Party's Loss
in
respect of this Agreement. If that amount is a positive number,
the
Defaulting Party will pay it to the Non-defaulting Party; if it is
a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii)
Termination Events. If the Early Termination Date results from
a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the
amount
payable will be determined in accordance with Section 6(e)(i)(3),
if
Market Quotation applies, or Section 6(e)(i)(4), if Loss
applies,
except that, in either case, references to the Defaulting Party
and
to the Non-defaulting Party will be deemed to be references to
the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the
amount payable is a positive number, Y will pay it to X; if it is
a
negative
number, X will pay the absolute value of that amount to Y.
(iii)
Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in
respect of
a party, the amount determined under this Section 6(e) will be
subject to
such adjustments as are appropriate and permitted by law to
reflect
any payments or deliveries made by one party to the other under
this
Agreement (and retained by such other party) during the period
from
the
relevant Early Termination Date to the date for payment
determined
under
Section 6(d)(ii).
(iv)
Pre-Estimate. The parties agree that if Market Quotation applies
an
amount
recoverable under this Section 6(e) is a reasonable pre-estimate
of
loss and
not a penalty. Such amount is payable for the loss of bargain
and
the loss
of protection against future risks and except as otherwise
provided
in this Agreement neither party will be entitled to recover any
additional
damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any
interest or
obligation in or under this Agreement may be transferred (whether
by way of
security or otherwise) by either party without the prior written
consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to
a
consolidation or amalgamation with, or merger with or into, or
transfer of all
or substantially all its assets to, another entity (but without
prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its
interest in any
amount payable to it from a Defaulting Party under Section
6(e).
Any purported transfer that is not in compliance with this Section
will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this
Agreement will
be made in the relevant currency specified in this Agreement for
that payment
(the "Contractual Currency"). To the extent permitted by applicable
law, any
obligation to make payments under this Agreement in the Contractual
Currency
will not be discharged or satisfied by any tender in any currency
other than the
Contractual Currency, except to the extent such tender results in
the actual
receipt by the party to which payment is owed, acting in a
reasonable manner and
in good faith in converting the currency so tendered into the
Contractual
Currency, of the full amount in the Contractual Currency of all
amounts payable
in respect of this Agreement. If for any reason the amount in the
Contractual
Currency so received falls short of the amount in the Contractual
Currency
payable in respect of this Agreement, the party required to make
the payment
will, to the extent permitted by applicable law, immediately pay
such additional
amount in the Contractual Currency as may be necessary to
compensate for the
shortfall. If for any reason the amount in the Contractual Currency
so received
exceeds the amount in the Contractual Currency payable in respect
of this
Agreement, the party receiving the payment will refund promptly the
amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any
judgment or
order expressed in a currency other than the Contractual Currency
is rendered
(i) for the payment of any amount owing in respect of this
Agreement, (ii) for
the payment of any amount relating to any early termination in
respect of this
Agreement or (iii) in respect of a judgment or order of another
court for the
payment of any amount described in (i) or (ii) above, the party
seeking
recovery, after recovery in full of the aggregate amount to which
such party is
entitled pursuant to the judgment or order, will be entitled to
receive
immediately from the other party the amount of any shortfall of the
Contractual
Currency received by such party as a consequence of sums paid in
such other
currency and will refund promptly to the other party any excess of
the
Contractual Currency received by such party as a consequence of
sums paid in
such other currency if such shortfall or such excess arises or
results from any
variation between the rate of exchange at which the Contractual
Currency is
converted into the currency of the judgment or order for the
purposes of such
judgment or order and the rate of exchange at which such party is
able, acting
in a reasonable manner and in good faith in converting the currency
received
into the Contractual Currency, to purchase the Contractual Currency
with the
amount of the currency of the judgment or order actually received
by such party.
The term "rate of exchange" includes, without limitation, any
premiums and costs
of exchange payable in connection with the purchase of or
conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable
law, these
indemnities constitute separate and independent obligations from
the other
obligations in this Agreement, will be enforceable as separate and
independent
causes of action, will apply notwithstanding any indulgence granted
by the party
to which any payment is owed and will not be affected by judgment
being obtained
or claim or proof being made for any other sums payable in respect
of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient
for a party to demonstrate that it would have suffered a loss had
an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire
agreement and
understanding of the parties with respect to its subject matter and
supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of
this
Agreement will be effective unless in writing (including a writing
evidenced by
a facsimile transmission) and executed by each of the parties or
confirmed by an
exchange of telexes or electronic messages on an electronic
messaging system.
(c) Survival of Obligations. Without prejudice to Sections
2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will
survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the
rights,
powers, remedies and privileges provided in this Agreement are
cumulative and
not exclusive of any rights, powers, remedies and privileges
provided by law.
(e) Counterparts and Confirmations.
(i) This
Agreement (and each amendment, modification and waiver in
respect
of it) may
be executed and delivered in counterparts (including by
facsimile
transmission), each of which will be deemed an original.
(ii) The
parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether
orally or
otherwise). A Confirmation shall be entered into as soon as
practicable
and may be
executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of tel